Hogs
Price action: June lean hog futures rose $1.60 to $100.225, nearer the daily high.
Fundamental analysis: The lean hog futures market saw short covering in a bear market today. The near-term technical posture for June hogs remains bearish as prices are in a downtrend on the daily bar chart. The latest CME lean hog index is down 23 cents at $90.79. Tuesday’s projected cash index price is down another 38 cents at $90.41. The national direct five-day rolling average cash hog price quote today is $95.11. The noon report today showed pork cutout value up $1.23 at $98.79, led by gains in butts and picnics. Movement at midday was decent at 177.92 loads.
Technical analysis: June lean hog futures bears have the overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at $104.45. The next downside price objective for the bears is closing prices below solid technical support at $95.00. First resistance is seen at today’s high of $100.90 and then at last week’s high of $101.95. First support is seen at last week’s low of $98.60 and then at $97.50.
What to do: Get current with feed coverage.
Hedgers: You have 50% of Q2 production hedged with all remaining risk in the cash market.
Feed needs: You should have all your soymeal and corn-for-feed needs covered in the cash market through May. Be prepared to make additional purchases.
Cattle
Price action: June live cattle rose $0.50 to $249.40, near the daily high after hitting a two-week low early on. August feeder cattle lost $1.925 to $362.30, near mid-range and hit a two-week low.
Fundamental analysis: The live cattle futures market saw mild profit-taking pressure early on today but rebounded late on the news of the solidly higher cash cattle trading price average last week. Feeders also profit taking but also weak long liquidation and fresh technical selling featured today. Also a negative for the cattle futures markets today was a report in the WSJ that said the Trump administration is planning to temporarily lower tariffs on beef imported into the U.S., in an effort to lower retail beef prices. August feeders are facing the prospect of a bearish double-top reversal pattern on the daily bar chart. Selling interest in live cattle futures today was limited by higher cash cattle prices last week. USDA at midday today reported average cash cattle trading last week taking place at $258.52, up $3.50 from the week prior. The noon report today showed wholesale boxed beef cutout values higher. Choice-grade was up $2.27 at $390.66, while Select-grade gained $4.74 to $389.75. Movement at midday was 53 loads. The Choice-Select spread at midday today was plus $0.91.
Technical analysis: Cattle futures bulls have the overall near-term technical advantage but are fading. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $256.625. The next downside technical objective for the bears is closing prices below solid technical support at $240.925. First resistance is seen at today’s high of $252.15 and then at $253.725. First support is seen at today’s low of $245.475 and then at $244.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $379.45. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at today’s high of $367.45 and then at $370.00. First support is seen at today’s low of $357.25 and then at $355.00.
What to do: Cover corn-for-feed and soymeal needs through May in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn and soymeal for feed needs covered in the cash market through May. Be prepared to make additional purchases if value prices continue.